Kogan plummets by a third after warning overseas rivals are squeezing margins

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Kogan.com has blamed “now apparent avoidance of GST” by a number of overseas websites selling into Australia for a decrease in its global brands revenue in the September quarter.

Kogan (ASX:KGN) fell by a third to $3.12 in early Monday trade.

The online retailer told investors gross margins had decreased as a result of competition from foreign websites selling into Australia without GST, as well as a general decline in the strength of the Australian dollar.

“New GST laws on low value eCommerce import transactions were introduced on 1 July 2018,” the company said.

“Initially, this saw some competitors exit the market and the Company’s July Revenue grew 33% year-on-year.

“More recently, widespread avoidance of GST has become apparent.

“At this stage, the Company is unable to determine whether the recent widespread avoidance of GST will be temporary.”

The Kogan (ASX:KGN) share price over the past year.

Kogan.com posted a 277 per cent rise in full year profit to $14.1 million in FY18, up more than $10 million from last year’s $3.7 million.

The result came as revenue jumped by $122.8 million or 42 per cent to $412.3 million.